A coalition of student loan borrower advocacy organizations are calling on the Biden administration to take dramatic steps to provide immediate student loan forgiveness to borrowers working in public service.
The Public Service Loan Forgiveness (PSLF) program was designed to provide certain federal student loan borrowers with the ability to get their student loans forgiven after several years of working in the public service field. Although the program is often described as a 10-year program, PSLF technically requires 120 “qualifying” monthly payments (if those payments are made consecutively, this is equivalent to 10 years, although the program does not require consecutive payments). A qualifying payment is one made on a Direct federal student loan under a qualifying repayment plan (usually an income-driven plan) while working in full-time employment for a public or nonprofit organization.
The PSLF program has been plagued with problems since its inception, however. For many years, student loan borrowers were not given clear information on the eligibility criteria of the Public Service Loan Forgiveness program. The Department of Education and its contracted loan servicers did a poor job communicating the requirements to borrowers, and sometimes actively misled them.
Even now, after the Education Department has taken some limited steps to improve the program, PSLF has an abysmal approval rate of only around 2%, with the vast majority of applicants rejected due to technicalities. Most recently, borrowers hoping to have their student loans forgiven have been encountering lengthy and frustrating processing delays, forcing some to wait six months or longer for a decision.
Today, a diverse coalition of nearly 100 advocacy organizations sent a letter to Education Secretary Miguel Cardona, calling on him to use emergency pandemic authorities to conduct a full, 90-day audit of the “broken” Public Service Loan Forgiveness program and to cancel the student loan debt of all student loan borrowers who have completed ten or more years of public service, regardless of their specific compliance with the PSLF program’s complex eligibility criteria.
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“Communities across our nation depend on passionate people who dedicate themselves to public service,” said David Stern, executive director at Equal Justice Works, one of the coalition leaders. “Student loan debt is a huge barrier to taking relatively low paying public service jobs and PSLF promises forgiveness after 10 years of public service. Hundreds of thousands of people relied on that program only to be rejected. At Equal Justice Works, we believe our country must deliver on its promise to forgive the debt of public servants after 10 years of service, sacrifice, and contributions.”
The push to address the troubled PSLF program comes amid an ongoing pressure campaign to convince President Biden to enact widespread student loan forgiveness via executive order. Biden has been resistant to using executive authority to cancel student debt, but the administration is considering its options. Last week, the Biden administration announced that attorneys under Secretary Cardona will be exploring potential legal authorities that could be the basis for widespread student loan forgiveness implemented through executive action. The Department of Education will coordinate its efforts with the U.S. Department of Justice, which is also reviewing possible legal avenues for student loan forgiveness using executive authority. It could be weeks or months before a decision is made.